Lease IFRS 16


In 2016, IASB published a new lease accounting standard, IFRS 16, to replace the older standard, IAS 7. IFRS 16 came into effect from January 1, 2019.


Discuss the classification, recognition and measurement provisions of IAS 17 for finance and accounting leases.

IAS 17 had been criticized for a long time in particular by the airline industry. Discuss the criticism on IAS 17 using the example of an airline. Your answer must clearly discuss the measurement and recognition issues pertaining to IAS 17.

Discuss, in detail, the new rules for lease classification, recognition, measurement and disclosure as per IFRS 16.

Discuss the impact of IFRS 16 application on lessee’s statement of financial position, income statement, cashflows and financial ratios. Answers must be supported by actual examples from companies which have transitioned from IAS 17 to IFRS 16.

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